The Liberals are the party of the left, but in the late 90s and early 2000s Canada was drowning in debt and a new path was needed.

This is good stuff, once we overcome translation issues, we can learn here !

OK, so since the "political party terminology exchange rate" between the US and Canada is not 1.0, lets focus more on actions and outcomes, rather than inconsistent labels that might muddy the waters.

So when drowning in debt, and a new path was needed (sound familiar in 2012?) a Canadian political party set things on the road to financial stability by doing stuff such as slashing spending then ? And history has proven that to be a wise choice?

Slashing spending would of course result in a smaller government, unless everyone is happy to take huge pay cuts. In the United States, I would humbly suggest that most people who tend to support the idea of less government would be more likely to call themselves "conservative" than "liberal". Those labels may not mean quite the same in Canada, which is useful to keep in mind, but that successful model can still be copied regardless.